EU set to revise palm oil-based biofuel rules following WTO ruling in favour of Indonesia

Announced on 10 January, the ruling was seen as a major victory for the world’s largest palm oil producer in its long-standing dispute with the EU over biofuel trade restrictions, the 17 January report said.

Indonesia brought the case to the WTO dispute body in 2019 after the EU classified palm oil-based biofuel as “high risk” due to its links to deforestation and ruled that its use in transport fuel would be phased out between 2023 and 2030.

While the WTO decision upheld the EU’s classification of palm oil-based biofuel as “high risk” it found flaws in how the directive was implemented, the report said.

Specifically, the WTO found that the EU’s Delegated Regulation 2019/807 (delegated act) was inconsistent with international trade rules.

French tax incentives that excluded palm oil-based biofuels while favouring rapeseed and soyabean alternatives were also deemed discriminatory, according to theJakarta Globe report.

In its statement on 10 January, the EU pledged to address the issues, which were already under review as part of its regulatory framework, to bring its policies in line with WTO obligations. The adjustments were expected to be finalised within 60 days unless the ruling was appealed, the report said.

In its dispute initiated in 2019, Indonesia claimed that the RED unfairly targeted palm oil while benefiting EU-produced biofuels, the Jakarta Globe wrote.

Tags: exports, Indonesia, European Union, WTO, palm oil, World Trade Organization, biofuel, Renewable Energy Directive